st_7 138 Report post Posted January 29, 2014 Lenovo Bought Motorola Mobility For $2.91 Billion From Google!! In a surprising move, Google sold its $12.5 billion purchase, Motorola Mobility, to Lenovo for just $2.91 billion. Many eyebrows were raised by the hefty price that Googled decided to pay for Motorola Mobility back in August, 2011 & many opined that Google has gone over the board. Proving those opinions, Google could only sell it for just $2.91 billion although Google is set to keep the patents of Motorola Mobility(the main reason that was thought to be behind Google's willingness to pay a huge amount in purchasing Motorola Mobility back in 2011, although they didn't help Google in fighting patent wars successfully against Apple & Microsoft). Below is the official press release from the both businesses on this acquisition. Lenovo to Acquire Motorola Mobility from Google Research Triangle Park, North Carolina, and Mountain View, California – January 29, 2014: Lenovo (HKSE: 992) (ADR: LNVGY) and Google (NASDAQ: GOOG) today have entered into a definitive agreement under which Lenovo plans to acquire the Motorola Mobility smartphone business. With a strong PC business and a fast-growing smartphone business, this agreement will significantly strengthen Lenovo’s position in the smartphone market. In addition, Lenovo will gain a strong market presence in North America and Latin America, as well as a foothold in Western Europe, to complement its strong, fast-growing smartphone business in emerging markets around the world. The purchase price is approximately US$2.91 billion (subject to certain adjustments), including US$1.41 billion paid at close, comprised of US$660 million in cash and US$750 million in Lenovo ordinary shares (subject to a share cap/floor). The remaining US$1.5 billion will be paid in the form of a three-year promissory note. Lenovo, which in 2005 acquired IBM’s PC business and its legendary PC brand, will now acquire world-renowned Motorola Mobility, including the MOTOROLA brand and Motorola Mobility’s portfolio of innovative smartphones like the Moto X and Moto G and the DROID™ Ultra series. In addition to current products, Lenovo will take ownership of the future Motorola Mobility product roadmap. Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio. Motorola Mobility enjoys outstanding brand awareness around the world, and is currently the #3 Android smartphone manufacturer in the U.S. and #3 manufacturer overall in Latin America. “The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing, chairman and CEO of Lenovo. “We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business. Lenovo has a proven track record of successfully embracing and strengthening great brands – as we did with IBM’s Think brand – and smoothly and efficiently integrating companies around-the-world. I am confident we will be successful with this process, and that our companies will not only maintain our current momentum in the market, but also build a strong foundation for the future.” “Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO, Google. “As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility. The transaction is subject to the satisfaction of regulatory requirements, customary closing conditions and any other needed approvals. Source Share this post Link to post Share on other sites
Venkatagiri 53 Report post Posted January 30, 2014 Google selling Motorola phone business to Lenovohttp://timesofindia.indiatimes.com/tech/tech-news/internet/Google-selling-Motorola-phone-business-to-Lenovo-for-2-9-billion/articleshow/29575449.cms Share this post Link to post Share on other sites
Parth 10 Report post Posted January 30, 2014 Google selling off Moto - http://www.businessweek.com/articles/2014-01-29/google-ends-its-motorola-misadventure Share this post Link to post Share on other sites
digitalnirvana 646 Report post Posted January 30, 2014 Google sells Motorola to Lenovo for $2.91 billion By Jacob Kastrenakes 7 Hours Ago Google is selling Motorola Mobility to Lenovo, giving the Chinese smartphone manufacturer a major presence in the US market. Lenovo will buy Motorola for $2.91 billion in a mixture of cash and stock. Google will retain ownership of the vast majority of Motorola's patents, while 2,000 patents and a license on the remaining patents will go to Lenovo. At the deal's closing, Lenovo will pay Google $660 million in cash and $750 million in stock, while the remaining $1.5 billion will be paid out over three years. GOOGLE BELIEVES LENOVO CAN TURN MOTOROLA INTO "A MAJOR PLAYER WITHIN THE ANDROID ECOSYSTEM." "Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," Google CEO Larry Page said in a statement. "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere." Google initially bought Motorola Mobility for $12.5 billion back in 2012, but it said at the time that it was mainly interested in the company's patent portfolio. Now, Google is offloading its subsidiary's handset business, which has been losing hundreds of millions each quarter since the purchase. Google will hold on to Motorola's ambitious Advanced Technology and Projects group, however, and it previously sold off Motorola's set-top box unit for over $2 billion. Though patents are a large part of what drew Google's interest to Motorola in the first place, those patents haven't been as helpful as Google initially hoped. Google seems to have highly overvalued Motorola's portfolio, which hasn't been able to bring in nearly as much in royalties as either company seemingly expected. It also hasn't been able to use those patents very aggressively, seeing them fail when used in an attempt to block sales of the iPhone. The entire ownership of Motorola has been something of a headache for Google, and it appears that it's finally time for Google to cut its losses. That's good news for Lenovo, which has been vocal about its intention to move into the US smartphone market this year. Lenovo hasn't made much headway with that until now. It made a bid for BlackBerry late in 2013, but its offer was ultimately blocked. Now, it'll see a much stronger start with the purchase of Motorola. Motorola actually marks Lenovo's second acquisition announcement this month: just last week it said that it had reached a deal to buy IBM's x86 server business. The purchase of Motorola plays to Lenovo's experience in taking an established brand and building upon it. It purchased its ThinkPad business from IBM in 2005, and has gone on to create a continually successful line of laptops from it. Lenovo is certainly hoping to do the same with Motorola, which has consistently built strong devices but has often struggled against competitors with more marketing muscle. "The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones," Lenovo CEO Yang Yuanqing said in a statement. "We will immediately have the opportunity to become a strong global player in the fast-growing mobile space." "WE WILL BECOME A MUCH STRONGER NUMBER THREE SMARTPHONE COMPANY." Both Lenovo and Google have high expectations for Motorola coming out of the acquisition. Motorola said the acquisition will help it to achieve the rapid growth it's looking for. "With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this," Motorola CEO Dennis Woodside said in a statement. In an alleged email to employees, which has been leaked to TechCrunch, Page said that he believes Motorola will do better under a company that can fully commit to a focus on smartphones. "The smartphone market is super competitive, and to thrive it helps to be all in when it comes to making mobile devices," Page wrote. "It’s why we believe that Motorola will be better served by Lenovo." On a conference call discussing the acquisition, Yuanqing said that Woodside and Motorola's existing management team would be staying on board. Yuanqing also said that he felt the two brands were complimentary, and that both the Motorola and Lenovo brand would remain in use where they were already strong. "A detailed plan will be made after we close the deal," Yuanqing said. "WHY AM I SO CONFIDENT? I HAVE SEVERAL REASONS." Despite Motorola's ongoing struggle to reach profitability, Yuanqing is extremely optimistic about what it will do under Lenovo. "Why am I so confident? I have several reasons." Yuanqing cites five: it will immediately make Lenovo a major smartphone company in the US and give it relationships with over 50 wireless carriers worldwide, Motorola is an established and respected brand, the deal includes important patents and licenses, it will help address new markets with a diverse smartphone lineup, and it brings along Motorola's expertise in mature smartphone markets. Despite his intention to continue using the Lenovo name where it's strong, Yuanqing emphasized that the Motorola name would play a major role in its ability to compete in the United States and other major markets. "We had a similar opportunity with the Think brand, and we succeeded," Yuanqing said. He believes the acquisition will ultimately make Motorola a far stronger smartphone manufacturer, turning it into a capable competitor against the industry's giants. "We will become a much stronger number three smartphone company," Yuanqing said, referencing Motorola's position as the third-place Android smartphone manufacturer in the US. "Motorola brings a strong brand, brilliant engineering, great products, [and] outstanding relationships with retailers." News of Lenovo's acquisition of Motorola comes just a day before Google reports its quarterly earnings. Investors have been interested to know what Google plans to do about Motorola's mounting losses. Tomorrow may not deliver them good news from the previous quarter, but it appears that Google has given its final answer. Source Google, Motorola 1 Share this post Link to post Share on other sites
maniac8828 24 Report post Posted January 30, 2014 Looks like Lenovo on a roll. Last week they announced acquisition of IBM x86 portfolio....And now Motorola Share this post Link to post Share on other sites
KanagaDeepan 1,084 Report post Posted January 30, 2014 ^^^^^^ Good for everyone including Google, Motorola, Lenovo and we customers... How is it Good for customers:- [1] Future Moto phones will come with SD slot [2] Future Moto phones (NOT just from Verizon) will come with bigger battery, as Lenovo is another phone maker concentrates on bigger battery [3] Moto phones may reach India faster with Lenovo than Google [4] More DualSIM (esp C+G) under Moto /Lenovo brand with bigger battery in India What is BAD for us:- [1] Updates will get slower [2] We will miss its near STOCK Android experience [3] More BLOAT in future phones [4] Return of the BL Lock ghost TBH the way Google handled Moto is NOT upto my taste (removal of SD and removing Moto from India). The only good thing Google has done to Moto is faster updates, near Stock UI and minimum bloat only... 6 Share this post Link to post Share on other sites
digitalnirvana 646 Report post Posted January 30, 2014 Moto has to be positioned as a low cost alternative to Samsung, hopefully Lenovo does that Another example of Chinese corporations making huge progress Also big loss for Google monetarily Share this post Link to post Share on other sites
drmadhu 87 Report post Posted January 30, 2014 Google think software business is far better than hardware Sent from my XT907 Share this post Link to post Share on other sites
digitalnirvana 646 Report post Posted January 30, 2014 (edited) Well there are a few factors that make this deal sensible 1 Motorola always operated as an independent company and being Google owned did not change that. There was no monopoly or extra help to Moto except more resources for development. Moto X and G were Moto products not Google ones. Google was very clear from the start that Moto will be treated equal to other oems. So this deal has minimal impact on Moto's product line up 2 Google retains all Motorola patents which was the main reason that they bought them in the first place 3 Google retaims Motorola R&D including skunkworks project ara etc 4 Google could not have turned Motorola around unless they merged nexus line with Moto and pushed Moto as their OEM. But that would have hurt Android and other OEMs would have switched to a different OS sooner or later. So Google let Motorola run independently without any special favors. Android is more important to Google than Motorola. Now that Lenovo has bought Motorola they will push the brand much more and get a chance to make progress in the USA market where they have low presence. Lenovo is the 5th largest OEM and are cash rich so this helps them and Motorola 5 Google was losing $248m each quarter due to Motorola so it helps them to cut losses and focus on R&D 6 Google has licensed the patents to Lenovo and will earn from that Edited January 30, 2014 by digitalnirvana 3 Share this post Link to post Share on other sites
pampum 2 Report post Posted January 30, 2014 Good analysis by digitalnirvana, thumps up Share this post Link to post Share on other sites
KanagaDeepan 1,084 Report post Posted January 30, 2014 Motorola always operated as an independent company and being Google owned did not change that. Actually Google has changed few things in real, like (1) removing SD slot, (2) negotiating with carriers for minimum bloat and (3) faster updates. other OEMs (I am looking at Sammy) (1) oems like it - as SD slot removal is loss of feature for Moto, (2) oems don't care much, this point wrt bloat (3) faster updates - brought nightmares to OEMs. Earlier Sammy has got good name for Android updates like JB to S2 that came with GB. The deal is looking like much to please SAMMY, imho... Few days back they Goog and Sammy signed cross licensing agreement, remember friends??? Share this post Link to post Share on other sites
digitalnirvana 646 Report post Posted January 30, 2014 Motorola always operated as an independent company and being Google owned did not change that. Actually Google has changed few things in real, like (1) removing SD slot, not unique to Moto! In fact HTC, Sony do it too! It is Google's decision to optimize Android and one of the ways to do it is by using internal memory only. It is a platform level decision not OEM level. Apple do the same too! (2) negotiating with carriers for minimum bloat and No idea on this so cannot comment but you must keep in mind that Moto G is prepaid mainly so anyway it will carry less carrier bloat. Moto X does have bloat. (3) faster updates. Again a myth. It was Moto's decision to use a lighter UI. This allowed them to roll out OTAs faster. Google has no say in it. Moto CEO has gone on record many times categorically saying that they do not get any extra favor from Google for Android other OEMs (I am looking at Sammy) (1) oems like it - as SD slot removal is loss of feature for Moto, (2) oems don't care much, this point wrt bloat (3) faster updates - brought nightmares to OEMs. Earlier Sammy has got good name for Android updates like JB to S2 that came with GB. The deal is looking like much to please SAMMY, imho... Few days back they Goog and Sammy signed cross licensing agreement, remember friends??? Comments inline I strongly believe this will be a good deal for both Lenovo and Motorola Google could not push Motorola as it's flagship OEM as that would have pissed off all other Android OEMs. This was hampering Motorola Better let it prosper under new ownership Also, Google has the actual value i.e. patents and only Motorola Mobility and it's present and future products have been sold to Lenovo. Google actually wanted to buy only Motorola's patents way back but Motorola CEO forced them to buy entire company. Google were actually trying to buy Nortel but failed and then bought Motorola. Google got what it wanted - patents, R&D and IP rights. Hardware OEM is not Google's area so they cut their losses. It is a win win for all Share this post Link to post Share on other sites
matriX1218 44 Report post Posted January 30, 2014 I'm using Motorola phones since last almost 10 years... Moto always remained stick to it's 6Sigma standards... because of it customers suffered a lot... no updates for almost all phones...due to locked bootloader...no custom stock ROM.. I wonder what what Lenovo will do..!!! Moto's policies are like... "Always Use umbrella but not in rain or summer". sent from Motorola DROID BIONIC HD on Reliance Wireless Share this post Link to post Share on other sites
st_7 138 Report post Posted January 31, 2014 (edited) As it has been the hot topic on the amount of loss that Google has made on their investment on Motorola Mobility, there have been lot of calculations on how much really Google has lost on this purchase & sale of Motorola Mobility. For us layman the calculation is simple, Google bought Motorola Mobility at $12.5 billion & sold for $2.91 which means that a cool $9.6 billion loss. But according to the Newyork Times special report on this particular deal, the amount is completely different. I'll quote a small portion of that report, which has been republished by many technical blogs as well When Google bought Motorola the latter was sitting on $3 billion in cash and close to $1 billion in tax credits so the deal cost Google around $8.5 billion. Then Google sold Moto’s set-top box business to Arris for around $2.4 billion, rounding the total to $6.1 billion. Finally by subtracting the $2.9 billion from Lenovo and you’re looking at a $3.2 billion loss by Google. And even $3.2 billion is not a loss considering the Google has got the chance to keep all the patents of Motorola Mobility. And if some one says, what about the millions of dollars loss of operation costs of Motorola Mobility in the last 2-3 years. Well, along with Motorola Mobility's patents, Google will also get the chance to keep the project 'Ara'(Modular cell phone) and also Lenovo will continously be paying royalty fee to Google for the use of Motorola Mobility's patents. All in all, the out come of all this Motorola Mobility's episode is that Google got Motorola Mobility's patents & Ara project for as cheap as $3.2 billion the same amount that Google paid for the purchase of Nest Labs(Home Products manufacturer). Source: GSMArena & Newyork Times. Edited January 31, 2014 by st_7 3 Share this post Link to post Share on other sites
copperco2 24 Report post Posted January 31, 2014 Very good analysis. Google had bought one whole and profited by selling in parts. Sent from my RM-914 using Tapatalk Share this post Link to post Share on other sites
digitalnirvana 646 Report post Posted January 31, 2014 Exactly, I keep giving the same argument on another forum - Google owns the IP rights and that will prove to be the most valuable long term Google anyway did not want to buy entire Motorola, they were always after the patents but the then CEO of Motorola forced Google to buy the entire company Also note Google wanted to go after Nortel and then bought Motorola only after failing to buy them due to an Apple led consortium winning the race Google still owns Motorola R&D including skunkworks, project ara etc plus all of Motorola's patents which it will license to Lenovo and earn from there also Essentially Google is selling Motorola Mobility hardware division and the only thing Lenovo is getting is rights on all existing and future products that Motorola Mobility was working on This is a good deal for all Share this post Link to post Share on other sites
